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Alnylam Losses Widened by Tekmira Settlement

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Alnylam Pharmaceuticals finished the fourth quarter and all of 2012 in the red, hurt by a one-time $65 million charge to settle nearly two years of lawsuits vs. Tekmira Pharmaceuticals over lipid nanoparticle (LNP) technology for RNA interference (RNAi) therapeutics.

Alnylam finished Q4 2012 with a net loss of $62.2 million or $1.20 per share on both a basic and diluted basis, compared with a net loss of $14.3 million, or 33 cents per share for the final three months of 2011.

In November, Alnylam agreed to pay Tekmira $30 million for rights to manufacture its own LNP-based products in the future, either by itself or through a third party. Alnylam said at the time it would use that capability to advance its ALN-TTR02 drug candidate—which targets the transthyretin (TTR) gene to treat TTR-mediated amyloidosis (ATTR)—into Phase III clinical trials expected to start by year’s end; ALN-TTR02 is the subject of a Phase II clinical trial in Europe.

Alnylam also agreed to pay Tekmira $35 million to buy down its milestone and royalty payments owed for ALN-TTR02 and two other drug candidates: ALN-VSP for liver cancers and potentially other solid tumors with liver involvement, and ALN-PCS for high levels of cholesterol in the blood.

Q4 2012 revenues tumbled to $8.5 million from $20.5 million in the previous fourth quarter. The company blamed the revenue plunge on completion during the third quarter 2012 of the amortization period for the company’s alliance with Roche, which assigned its rights and obligations to Arrowhead Research Corporation during 2011.

The Q4 revenue drop occurred despite Alnylam collecting $5.5 million from its alliance with Takeda Pharmaceuticals; $1.4 million from its alliance with Monsanto, and $1.6 million of expense reimbursement, amortization, and/or license fee revenues from other sources that include Cubist Pharmaceuticals, InterfeRx™, research reagent and services licensees, and other sources.

For the year ended December 31, 2012, Alnylam nearly doubled its net loss to $106 million or $2.11 per share, from a net loss of $57.6 million, or $1.36 per share for the previous year. Full-year revenues fell 19%, to $66.7 million last year from $82.8 million in 2011.

Alnylam said last year’s revenues included $37.3 million of collaboration revenues related to the company’s alliance with Roche/Arrowhead, $22 million related to the company’s collaboration with Takeda, and $7.4 million of revenues related to the company’s collaborations with Monsanto, Novartis, Cubist, research reagent licenses, and other sources.

Alnylam CEO John Maraganore, Ph.D., in a statement trumpeted the company’s clinical accomplishments during 2012—namely the enrollment of patients in a Phase II trial for ALN-TTR02, and presentation of data linking the drug candidate with a 94% knockdown of a disease-causing protein. That result, plus data from the company’s proprotein convertase subtilisin/kexin type 9 (PCSK9) showing up to a 50% decrease in LDL cholesterol, “served as unambiguous proof points that RNAi works in man,” he said.

Earlier this month, Alnylam began cashing in on its PCSK9 program by hammering out a collaboration that could net the company as much as $205 million. The Medicines Company will develop and commercialize for Alnylam a series of its RNAi drugs targeting PCSK9 for treating excess cholesterol in the blood. The Medicines Company will pay Alnylam $25 million cash up-front, and up to $180 million tied to undisclosed potential development and commercial milestones.

Also in 2012, Alnylam won approval for a Phase I study with ALN-TTRsc, a subcutaneously administered RNAi drug for ATTR. Alnylam also cited its presentation of preclinical proof-of-concept data for several other programs, including ALN-AT3 for hemophilia, ALN-TMP for hemoglobinopathies, and ALN-AAT for liver disease associated with alpha-1 antitrypsin deficiency. The company also cited its new ALN-AS1 program for the rare orphan disease acute intermittent porphyria.

“These important accomplishments give us great confidence in the continued execution of our ‘Alnylam 5x15’ product strategy, where we believe we can make a difference in the lives of patients and deliver value to our shareholders,” Dr. Maraganore said in the statement.

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